Maersk Introduce New China-Singapore Service

Maersk
Line expects container shipping
to grow 7% to 8% globally this year, with trade within Asia
outperforming that, in spite of soaring fuel costs and a slowing world economy.
    Its Asia
Pacific chief executive Jesper Praestensgaard said intra-Asia trade was growing
relatively more than between the regions, so Asia was probably more shielded
from a downturn in the US and Europe.
    He added
that the firm would introduce a new China-Singapore service from next week to
tap growing demand.
    Maersk
Line, part of Danish shipping and oil group A.P. MollerMaersk, now operates
over 500 container vessels and 1.9 million containers.
    Since June
it has ordered 34 new ships for delivery by 2012, amid concerns of an impending
oversupply in shipping capacity worldwide.
    “Shipping
is cyclical, everyone knows that. So when we make investments in shipping, we
invest in ships with lifespan of 25 to 30 years, and you have to measure
success over that lifespan,” said Praestensgaard.
    Soaring
bunker fuel prices, now at over US$750 per tonne, up from about US$500 in
January, represents over 50% of the firm’s operating costs, and has had a
significant impact on margins, he said.
    Maersk’s
biggest container ships, at full capacity, can consume an estimated 46,200
litres of fuel for every 100 km.
    Maersk Line
partially offsets its fuel costs by imposing a bunker adjustment charge on
customers, fuel hedging, and the practice of “slow steaming”, where shippers
operate vessels at slower speeds to cut fuel consumption and make up for it by
increasing the number of ships on a route.
    “There is
no doubt that the current oil prices is hindering global trade, both in terms
of reducing consumption and increasing transportation costs in general,” he
said.
    On mergers
and consolidation, Praestensgaard said, the potential merger between
Singapore-controlled Neptune Orient Lines (NOL) and HapagLloyd, the container
unit of Germany‘s
TUI AG, could be good for the industry that was now overly fragmented.
    He declined
to comment on Maerk’s own interest in the German shipper, but Maersk Line
global CEO Eivind Kolding told a German newspaper last month that he was not
ruling out takeovers and was keeping a close eye on HapagLloyd.
    Maersk Line
had shocked Singapore authorities when it decided in 2000 to take a 30% stake
in Port of Tanjung Pelepas (PTP) and shift most of its operations there,
threatening PSA Singapore Terminal dominance in the region.
    “The market
demand was to be in Singapore
as well, so that’s why we’re here too,” he said, adding that more of Maerk
Line’s operations were still based in PTP compared to PSA at this point, but
declined to give specifics.

 


 


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